In 2024, the Intergovernmental Fintech Working Group, a consortium of South African regulators that unveiled a position paper on crypto assets in 2021, is expected to “publish additions to include stablecoins as a particular type of crypto asset.” The consortium is also considering the impact of tokenisation on domestic financial markets and is expected to […]
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Major Party in South Korea Proposes to Defer Cryptocurrency Taxation
The People Power Party, a major political party in South Korea, has proposed to defer cryptocurrency taxation for up to two years as part of a general election pledge. The Korean government has already postponed establishing cryptocurrency taxation until 2025 when income generated from cryptocurrencies will be taxed at 22%. South Korea to Delay Cryptocurrency […]
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Blockchain Basics Act Introduced in Ohio, South Carolina, and Mississippi
The Blockchain Basics Act, a series of regulations aimed at safeguarding people’s cryptocurrency rights at a state level, has been introduced in three more U.S. states: Ohio, South Carolina, and Mississippi. With this move, similar cryptocurrency regulation has been introduced in seven states and passed in Missouri. Blockchain Basics Act Regulation Reaches Ohio, South Carolina […]
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South Korea to Expel Crypto Exchanges Failing to Meet Its Stringent Conditions
Cryptocurrency exchanges that fail to meet South Korea’s stringent operating standards will be expelled from the crypto market, the country’s financial intelligence agency has said. The Financial Intelligence Unit said its annual work plan incorporates the insights of cryptocurrency experts serving on its advisory committees. South Korea to Deploy System for Identifying Suspicious Transactions South […]
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South Korean Regulator Plans to Discuss Crypto Rules With US SEC Chair Gary Gensler
South Korea’s financial watchdog chief is planning to visit the U.S. to discuss crypto regulation with the chairman of the U.S. Securities and Exchange Commission (SEC), Gary Gensler, with a focus on the SEC’s recent decision to approve spot bitcoin exchange-traded funds (ETFs). He stressed that currently, the impact of SEC policies on the world is important.
South Korea Seeks to Discuss Crypto Regulation With SEC Chair Gary Gensler
South Korea’s Financial Supervisory Service (FSS) Governor Lee Bok-hyun announced on Monday his intention to visit leading financial markets in 2024, including the U.S., local media reported.
During these visits, the FSS chief plans to engage in discussions on key regulatory issues, including those pertaining to the cryptocurrency industry, with a particular focus on spot bitcoin exchange-traded funds (ETFs). He stated during a Q&A with reporters:
I will meet with SEC Chairman Gary Gensler (this year) and there are areas where we will focus on … such as virtual asset issues and bitcoin spot ETFs.
“Right now, the impact of SEC policies on the world is important … We [he and Gensler] need to meet and discuss this year,” the FSS governor emphasized.
After years of rejections, the U.S. Securities and Exchange Commission (SEC) approved 11 spot-bitcoin exchange-traded funds (ETFs) on Jan. 10. Ten of them began trading the next day, including Grayscale’s Bitcoin Trust (GBTC), which converted into a spot-bitcoin ETF, and Ishares Bitcoin Trust (IBIT) by Blackrock, the world’s largest asset manager.
South Korea has yet to approve any spot bitcoin ETFs. Currently, virtual assets are not defined as financial products in the country, therefore the launch of spot bitcoin ETF would be considered a violation of the Korean Capital Market Act, which mandates that ETFs track underlying assets like stocks and bonds.
What do you think about the South Korean regulator planning to discuss crypto regulation with SEC Chair Gary Gensler, including issues surrounding spot bitcoin ETFs? Let us know in the comments section below.
Former Terraform Labs Financial Officer Has Been Extradited to South Korea — Montenegro Police
Montenegro recently extradited the former Terraform Labs financial officer Han Chang-joon to South Korea where he faces fraud-related charges. According to the Montenegro police, the decision to extradite Han was made by the country’s Justice Ministry.
Han Faces Criminal Charges in South Korea
Han Chang-joon, the former financial officer of Terraform Labs, has been extradited to South Korea, the Montenegro police have said. The extradition comes almost a year after he and Terraform Labs co-founder Do Kwon were arrested while attempting to flee the country.
According to the police, the decision to transfer Han into South Korean custody was made by the Montenegro Justice Ministry. As previously reported by Bitcoin.com News, Han and Do Kwon were arrested after authorities found them in possession of counterfeit identity documents.
They were subsequently sentenced to four months in jail for the offence. Do Kwon later appealed the verdict, but a superior court reportedly rejected his appeal in November 2023.
Explaining the government’s decision to extradite the financial officer, the Montenegro police said:
Han [was extradited to allow South Korean authorities to initiate] criminal proceedings for several criminal offences related to fraud in financial investment services, investments and the capital market, which is punishable by life imprisonment in South Korea.
However, concerning the extradition of Do Kwon, who is wanted by both South Korean and U.S. authorities, the Terraform Labs co-founder’s lawyer said they were waiting for the court to make a ruling on another appeal.
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South Korean Prosecutor in Court for Passing Information to a Virtual Asset Investment Fraudster
On Jan. 30, a South Korean court continued with the trial of a prosecutor who is accused of passing sensitive information on the progress of an investigation to an alleged virtual asset investment fraudster. According to the Gwangju District Prosecutor’s Office, the acts by the prosecutor constitute a violation of the Attorney General Act.
Prosecutor Accused of Tipping Off Fraudster
On Jan. 30, a South Korean court held its third trial of a prosecutor who is accused of passing on sensitive information to an alleged virtual asset investment fraudster. The unnamed prosecutor, who allegedly received financial favors from the fraudster known only as Tak, faces bribery and violation of the Attorney General Act charges.
According to the Gwangju District Prosecutor’s Office, the prosecutor is believed to have informed the fraudster’s broker named Seong of the existence of a search and seizure against his client. For supplying this information, the prosecutor allegedly received cash and goods worth ,700.
The prosecutor is also accused of providing legal advice as well as writing and editing statements related to Tak’s criminal case. During his appearance as the court’s witness, Tak explained how Seong initiated the meeting between himself and the prosecutor. According to Tak, it was during one of their meetings in December 2020 when the prosecutor initially talked about altering his statement.
“I met with Mr. A at the office of a church one day with Mr. Seong, and he told me that I needed to revise my statement to sort out the details of the case,” the alleged fraudster reportedly told the court.
In his testimony, Tak said he only agreed to pay the bribe money after his broker warned him of an impending change in the fraud case. The broker allegedly told the fraudster that by making the payment would prevent his arrest. However, the prosecutor, through his lawyers, has disputed Tak’s claims and insisted that there is no way to prove that he indeed received the bribery money.
As per the report, as many as eight prosecutors and police officials linked to Seong’s investigation suppression tactics have been arrested.
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South African Regulator Expects to Determine Fate of 50 Crypto License Applications in ‘Coming Weeks’
The head of enforcement at South Africa’s financial industry watchdog said on Jan. 24 that he expects the organization to decide the fate of 50 crypto firms’ license applicants in the coming weeks. The watchdog stated that from the more than 100 entities that applied for a license, 20 have since withdrawn from their respective applications.
The Cost of Obtaining a License
An official with the Financial Sector Conduct Authority (FSCA), South Africa’s financial industry watchdog, announced on Jan.24 that the organization expects to determine the fate of some 50 crypto firms’ license applications in the coming weeks. Gerhard van Deventer, the head of enforcement at the FSCA, revealed that out of the 90-plus applicants, 20 have since withdrawn.
As reported by Bitcoin.com News in late 2023, the South African watchdog had received a total of 93 applicants just days before the Nov. 30 deadline. This figure, which ultimately rose to 105, consisted of both current holders of FSP licenses and fresh applicants. At the time, Diketso Mashigo, the FSCA’s compliance head, confirmed that some applicants had decided against pursuing the license. Some eventually opted to operate outside the South African market.
Deventer, who made the remarks during a podcast, said he agrees with the assertion that some of the applicants may have chosen to withdraw because they have may been spooked by the cost of obtaining the financial service provider (FSP) license.
Applicants Fail to Meet Key Requirement
The FSCA’s head of enforcement however suggested that some of the withdrawing applicants only did so after they became aware of the burden of getting the license. Deventer suggested that many of those applicants had no realistic chance of meeting one key requirement.
“Applicants got stuck on the requirement of having an appropriate key individual because such an individual will need to have a very specific and relevant experience, qualifications and skills. And there is not a lot of that around if you take into account that crypto has not been around for a long time,” the FSCA’s Head of enforcement said.
Some of the applicants who found themselves in this situation said they would only reapply when a suitable individual is found, Deventer added.
Meanwhile, when asked about the changes to regulations proposed by the FSCA, Deventer said tackling scammers who purposely choose to operate outside its regulatory ambit is what motivated it to make the amendments. According to Deventer, once the new regulations kick in it will now be impossible for such entities to avoid regulation of their activities.
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South African Fintech Startup Ukheshe Acquires 100% Stake in EFT Corporation
South African fintech startup Ukheshe recently announced that it has acquired a 100% stake in EFT Corporation, an Africa-focused payment services provider. According to the startup, the acquisition takes Ukheshe closer to its stated goal of attaining a larger footprint in Africa and beyond.
Access to New Technologies and Markets
The South African fintech startup, Ukheshe, recently disclosed that it had acquired a 100% stake in EFT Corporation, an Africa-focused payment services provider. The acquisition provides the combined entity with access to new technologies and opportunities and enhances Ukheshe’s exposure to different markets, customers, and business opportunities.
According to a statement from Ukheshe, the acquisition of EFT Corporation from its parent firm Loita Transaction Services (LXS) came nearly two years after it acquired the digital payment platform Masterpass. The takeover also occurred just a few months after the fintech startup closed its funding partnership with Development Partners International (DPI) in 2023.
Remarking on his company’s latest high-profile acquisition, Clayton Haywards, the co-founder and CEO of Ukheshe said:
“The market is ripe for consolidation and disruption, bringing together these like-minded executive teams & our great products positions us to dominate the African continent as the preferred banking solutions partner.”
As explained in the statement, the acquisition moves Ukheshe closer to its goal of expanding its footprint across Africa and beyond. This in turn helps the fintech startup deliver increased value to its stakeholders.
Stephen Enderby, CEO at EFT Corporation, said Ukheshe’s acquisition ended his firm’s search for a partner to support its digital strategy. James Griffiths, Partner at DPI, said the acquisition underscores his firm’s confidence in Ukheshe’s leadership and its growth potential.
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South Korea Mulls Issuing Crypto Mixing Regulations to Curb Money Laundering
Financial authorities are preparing to issue cryptocurrency mixing-specific regulations in South Korea to stop criminal groups from using these tools to launder funds obtained illegally. The Korean authorities are discussing whether to allow virtual asset service providers (VASPs) to reject transactions from these privacy-enhancing services.
South Korea Starts Discussing Cryptocurrency Mixing Regulations
Korea might enact regulations against cryptocurrency mixing platforms in the future. According to local reports, the Financial Intelligence Unit (FIU) would be considering the introduction of a legal framework targeting cryptocurrency mixing platforms, aiming to curb illegal money laundering by criminal groups.
The Korean authorities would be studying if to allow virtual assets service providers (VASPs) to reject transactions from addresses having used these services.
Mixing, a process that encompasses the obfuscation of the origin of the funds of a transaction or a series of transactions, has been targeted by the U.S. Treasury Department Financial Crimes Enforcement Network (FinCEN), which has proposed rules that seek to increase the transparency around platforms providing these services.
In October, the Office of Foreign Assets Control (OFAC) sanctioned Sinbad, a mixing platform linked to the North Korean hacking collective Lazarus. In August 2022, the office also flagged Tornado Cash, an Ethereum-based mixing platform.
The stance that the U.S. is taking on virtual assets mixing platforms has influenced the regulatory discussions now taking place in Korea. A FIU official stated:
Last year, when the United States introduced mixer regulations, discussions began in Korea as well.
These are only early talks about the issue, and a definitive decision on the subject is not expected to be announced anytime soon, given the nascent trait of the problem and the lack of international coordination in facing it. Another FIU officer stressed:
Mixing is an issue shared internationally, so cooperation from each country is necessary. As this is the first system introduced by the United States, international discussions have not yet progressed in depth.
What do you think about issuing specific cryptocurrency mixing regulations in South Korea? Tell us in the comment section below.